India to be the Next Cloud Computing Giant?

Research firm Zinnov has released an estimate that the cloud computing market within India is expected to reach $1.08 billion by 2015. This would be a ten-fold increase from today’s $110 million market. Software as a Service (SaaS) is expected to make up $650 million of that revenue, and Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will make up the rest.

“This is indeed a perfect storm. The only difference is that, this storm is destructive only to companies which are not willing to change, while it is a huge opportunity for others,” says Pari Natarajan, CEO of Zinnov.

The global cloud computing market, as a whole, is expected to increase from $58.6 billion in 2009 to $148.8 billion by 2014, as estimated by another firm, Gartner Inc. Much of the market’s growth is expected to come from outside of the US, from countries like the UK and Japan. American shares are expected to decrease from 60% in 2009 to 50% in 2014.

Cloud computing refers to using services without owning them, but by paying a subscription fee. Hardware and software infrastructure is often not necessary as the services come through an online network.

Cloud computing often entails enterprise applications such as ERP and CRM. The popular trend has been to use cloud computing because it can eliminate investment costs for software or deployment. Zinnov expects cloud computing to grow in major sectors such as banking and finances, telecommunications, manufacturing, and government. In particular, the Indian government has been more receptive to cloud computing than, say, the U.S. government.

So far, Indian software businesses have not been large players in the cloud market. However, cloud computing solutions have been readily accepted there for CRM or ERP applications, and many U.S. cloud companies, such as Zoho, hold certain operations in India. Also, Indian outsourcers have taken advantage of cloud computing to become even more competitive. Clearly, the texture of this market may change in the not-so-distant future.